Morph of a Nerd CEO - The Power of Silence

Morph of a Nerd CEO - The Power of Silence

Mr. Oak (not his real name but he values his privacy) taught me to negotiate.  Needless to say, negotiation is an essential skill for CEOs and it is a valuable one for nerds or anyone else.

In the late 1960s Mr. Oak was the Director of MIS Operations or some such title for a large conglomerate and I was Manager of Systems Programming, my usual nerd job.  Like most big companies we used IBM mainframes.  But we had brought some Other Vendor equipment into our data center in New York both to try it out and to give us some leverage over Big Blue. Lesson #1: leverage is good.  Unfortunately the Other Vendor mainframe didn’t run most of the time and wasn’t serviced promptly when it failed.  I couldn’t get the attention of anyone but our hapless and powerless account rep at Other Vendor, Inc. and I told Mr. Oak about the problem.

Naturally, Mr. Oak didn’t pay the bill for the equipment that didn’t work.  Lesson #2: holding the money is a position of power.  It’s much weaker to ask for a refund.  High executives from Other Vendor, Inc. requested an urgent meeting and threatened unspecified legal action.  Mr. Oak ignored the threat, waved off all the dates they proposed, and suggested some dates of his own further in the future.  They agreed to one of them.  Lesson #3: start winning right away, even on modalities.  Demanding and conceding are habits.

Mr. Oak had me gather all instances of malfunction and shoddy, tardy service in preparation for our meeting.  He turned down my suggestion that we give them this data in advance because, he said, we weren’t having a debate over the past, we wanted what we wanted in concessions in the meeting.  Lesson #4: negotiation is not debate.  I had been a very good debater in school.  I was still a very green negotiator.

Also he was not interested in thinking through what they might argue about our occasional failures to call them promptly or to read the documentation or follow instructions.  We must concentrate on arguing our case; not theirs.  Lesson #5: never negotiate with yourself.

“By the way, what do we want from them?” I asked.

“Money, of course,” said Mr. Oak, amused at my naiveté.

“What about better service in the future?” I asked.

“They’ll promise that anyway,” said Mr. Oak, “and they’re more likely to deliver if they understand that it costs them not to.”

“How much?” I asked.

“We need to find out how much authority they have,” he said.  “If it’s too little, we’ll have to negotiate with someone higher.”  But he wouldn’t be more specific than this about his goal.  Lesson #6: Know what dimension you want to win in.  In this case it was money but it doesn’t have to be. Lesson #7:  Don’t limit your aspiration until you find out what is achievable.  Aim high.

When the executives of Other Vendor, Inc. came in for the meeting, they were shown to a waiting room and plied with diuretics like coffee and tea and made to wait.  You can figure out Lessons #8 and #9 easily enough.  Before we went into the meeting half an hour after the appointed time, Mr. Oak surprised me by reminding me to go to the men’s room; it had been a long time since even my mother had done that.  He also told me forcibly not to speak except when he asked me a question.  He knew I liked to talk.

“What if they ask me a direct question?” I asked.

“Either I’ll answer it or ask you to or not,” he said.

We didn’t apologize for keeping them waiting.  Mr. Oak didn’t ask how they were hitting them or about their wives and families.  He instructed me to read the list of offences which I did.  When I finished, they started to read the list of our offences which Mr. Oak hadn’t let me prepare for.

“That’s irrelevant,” Mr. Oak said.  On his desk under a plastic sheet he kept lists of words.  They were in columns of harsh, strong, and mild.  For example, “fight”, “argue”, “discuss”.  Lesson #10:  Choose your few words carefully.

“What?” one of them said.

Mr. Oak said nothing.   With difficulty, I said nothing.

“We are prepared,” one of them said, “to give you a credit for the actual time the machine was down.”

“We already told you,” said Mr. Oak, “that it was worse than useless to us.”

They waited but he didn’t say anything else.  Finally, the other, higher ranking of them said “We will credit your whole past bill.”

“Then take the machine out,” said Mr. Oak.  Lesson #11: Don’t counter explicitly until you have to.

“We will give you three months credit going forward.”

Silence from Mr. Oak.  They are beginning to squirm as both the silence and their full bladders make them increasingly uncomfortable.

“Five months.  Tom, don’t you think that is enough time to evaluate and see that our machine is superior to IBM?”  But I had my instructions.  More silence.

We settled at full past credit, nine months future credit, and permanent onsite technical support with almost another computer worth of spare parts.  They hurried out to the men’s room as soon as they decently could.

Lesson #12:  There’s nothing as powerful as silence.  This is the most important lesson I learned that day from Mr. Oak.

Other confessions of a nerd turned CEO are:

How to tell if you’re an entrepreneur;

Starting as a sole practitioner;

The first employees;

Sales 101.

Comments

[Storage shed plans guy]

Great post,these lessons are useful for everyone.

[Celo Da Ros]

Very nice article,very usefull to think about.

I have made a translation of your article on my blog
refering to your site.

It can be seen at
http://cultureinternet.com/Tom-evslin-le-pouvoir-du-silence-traduction

[carlo]

simply superb, I'm going to use it! thanks for the lesson

[Chris Ostermueller]

As stated, this will not work all the time. Maybe in the infant computer industry in back then, hardball tactics worked, but as a rep managing mainframe sales now, I'd walk. Service works both ways.

[anonymoustroll]

Ah, yes... the inverse briefcase slammer. Be careful. Depending on the size of your account, they just might take you up on that offer to “Then take the machine out” and use it to court the nexet prospective client. Fortunately for you, you're still working in a shrinking buyer's market... in fact, that's probably why things went the way they did (and actually had very little to do with your "negotiating" "skill")

[James Seng]

Nice. Intimidation is a great negiotation tool. Done properly, they will love you even more ("just glad thats over") then ever.

[Dane Carlson]

Excellent post!

[Dom]

Tom, You actually taught me the "silence method" back in 1996. It works wonderfully and I have even passed along the method to others.

I just hope I don't negotiate with someone else who knows the "silent method". We'll be sitting there looking at each other for days!

[ellen]

I tried all these wonderful strategies on my subcontractors while building my own house. I was particulary displeased with one of the carpenters. I negotiated and won my point, but he came back at night and cut all my electrical homerun wires. Sometimes hard negotiations juist backfire in your face.

[Tom Evslin]

Chris, That's a good question.

In this case the vendor never did manage to get their equipment working properly but I think they tried harder, not less hard because we were a sqeaky wheel and this was on their nickel and not ours.

Certainly if you force someone into either a situation which they continue to lose from or is perpetually humiliating, you may pay more for the long term bad relationship than you gain from the temporary victory. Mr. Oak would say, however, that we are making up excuses for losing.

[Chris Yeh]

Great story. But did the hardline negotiations affect your relationship with the vendor in the future?

[David Zahn]

I read a book on sales strategy by the Dale Carnegie folks a while ago, one of the most memorable tidbits I got from this book was this simple rule: in a negotiation, after reaching an impasse, the smart negotiator will keep his mouth shut and just wait, because the first party to speak, after what may be a long silence, will usually make a concession. I have found this strategy to be tremendously effective.

[Parkite]

What a great post........it is beautiful to be in a position of power with leverage in a negotiation. It is actually fun.